The companies--which run half a dozen coal operations jointly under the moniker BHP Billiton Mitsubishi Alliance, or BMA--said they had begun consultation with employees at the Saraji mine near the town of Dysart in northeast Australia in a bid to ensure the future viability of the operation. The move follows what they said was an extensive review of the site, which found workforce cuts were needed to improve efficiency.

BHP Billiton executives last year said they would look to work existing operations harder, to drive margins and returns higher, as the world's largest mining company ruled out a further expansion of its coal business.

BHP and other Australian miners invested billions of dollars in new projects over the past decade against a backdrop of rising prices for minerals, particularly coal and iron ore, which are abundant in Australia and saw sharp demand growth in China. But a slowdown in the pace of demand and softening in prices have prompted many miners to curtail expansion plans and cut jobs at existing projects.

"A recent review of the Saraji mine by the company concluded that a fundamental improvement in the cost base of the open-cut operation is required to ensure that it remains competitive," BMA asset President Lucas Dow said in an emailed statement. "BMA has made a number of changes across its operations to reduce costs and increase productivity to ensure that our operations are profitable and sustainable," he said.

Coking coal prices have been falling as mine production rises sharply at a time when China's steel production has cooled. At US$127 a metric ton, Australian hard coking coal is trading at its lowest value since mid-2009.

The BMA joint venture is the world's biggest exporter of steelmaking coal and the largest private-sector employer in Queensland's resource-rich Bowen Basin, employing more than 10,000 staff and contractors.

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